In a real-world lbo model, do you bother to mark the target's balance sheet to fair value? Or is it more trouble than it's worth?
Just wondering what is done in practice.
| +145 | Restructuring: Anti-climactic Experience | 38 | 3h |
| +111 | IB Net Worth / Savings Check | 51 | 16h |
| +98 | Woman who emptied Knicks trashcan on street then stole it was DEI exec, worked at JPMorgan Chase | 25 | 14h |
| +79 | Stop sleeping on UBS - it’s pretty good | 29 | 13h |
| +72 | Hot take: I’d rather be at Desjardins than UBS for investment banking in 2026 | 13 | 8h |
| +56 | 2026 VAULT PRESTIGE RANKINGS | 30 | 13h |
| +39 | AI + Financial Modelling | 12 | 1d |
| +34 | Hardest interview experiences? | 20 | 11h |
| +28 | Summer before college | 18 | 7h |
| +26 | Current State of UBS in North America | 8 | 3d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
You'll get lawyers and accountants to do an estimate of it when you're acquiring a company and doing a step-up in an asset purchase, for instance. Never had to do it in banking though.
The step-up with a 338 or pure asset purchase will have (could have I should say) implications on the acquirers tax basis which can have a big impact on your B-Tax / A-Tax val. delta. However, in a standard LBO modeling situation, you're only concerned w/ debt service and mandatory repayment so it's less of an concern.
It'll impact your amortization and therefore the amount of cash taxes you need to pay
you will have that as part of the model but won't usually need to come up with the figures on your own unless you use some basic assumptions.
I've never done it.
Beatae quod possimus nisi voluptatem suscipit rerum. Quam numquam voluptatem a sed aspernatur quis. Eius provident asperiores et voluptas quaerat ratione dolor. Omnis eos rerum enim quia culpa voluptatem. Sapiente qui fugit perspiciatis ut occaecati dicta.
Quibusdam cumque impedit quos consequatur sed labore. Quasi voluptatem id excepturi eligendi. Modi sit corporis et aliquid nihil minus adipisci. Et recusandae et sit veritatis distinctio eos eaque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...